Institutional investors may turn their attention to altcoins as the next wave of exchange-traded funds (ETFs) arrives in the US, according to market analysts.
The US Securities and Exchange Commission (SEC) received at least five new applications for altcoin ETFs during the first half of October, despite the ongoing US government shutdown halting progress.
Each approval could “open the door to the next wave of institutional buying,” said Leon Wideman, head of research at analytics firm Web3 Onchain.
“Inflows from altcoin ETFs are the inevitable next step after Bitcoin and Ethereum ETFs demonstrated institutional demand,” Wideman told Cointelegraph. “This is regulatory confidence that translates into capital flows.”
Ether ETFs surpassed inflows from Bitcoin ETFs in the third quarter
Ethereum (ETH) ETFs attracted $9.6 billion in inflows during the third quarter of 2025, surpassing the $8.7 billion generated by Bitcoin (BTC) ETF inflows, according to Data SosoValue aggregator.
This shift indicates increasing institutional demand for alternative exposure to cryptocurrencies.
This trend could see altcoin ETFs spur the next wave of institutional altcoin adoption as new regulated vehicles, leading to years of sustained inflows, Wideman said.
“Institutions found Bitcoin via ETFs, and now they are moving to Ethereum, and other altcoins will come next.”
The industry’s most successful traders, who are tracked as “smart money” traders on Nansen’s blockchain intelligence platform, are also preparing to approve altcoin ETFs.
Uniswap (UNI), Aave (AAVE), and Chainlink (LINK) were the three most-held tokens by smart money traders on Thursday, Data From Nansen offers.
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However, some analysts are concerned that BlackRock’s absence from altcoin ETFs will lead to limited overall inflows, as BlackRock’s Bitcoin ETF has amassed $28.1 billion in investments so far in 2025, making it the only fund to record positive year-to-date (YTD) inflows.
Without BlackRock’s fund, Bitcoin ETFs have recorded cumulative net outflows of $1.27 billion year-to-date, According to to K33’s head of research, Vitel Lundy.
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The researcher explained that based on the dynamics seen in Bitcoin ETF investments, BlackRock’s absence from the wave of altcoin ETFs may limit cumulative inflows and their potential impact on the underlying tokens.
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